Nigerian Government Deep into Pension Account to Borrow N8.29trillion Despite Public Resistance
- In 2019, the federal government announced intentions to borrow N2 trillion from pension funds to support infrastructure projects
- The proposal provoked widespread outrage, with Nigerians overwhelmingly opposing it, prompting the government to abandon its plans
- Nevertheless, the Nigerian government continue to borrow from pension fund indirectly through investment securities
PAY ATTENTION: Click “See First” under the “Following” tab to see Legit.ng News on your Facebook News Feed!
The federal government has borrowed a whopping N8.29 trillion from Pension Fund Assets which stood at N12.9 trillion at the end of August 2021.
Though, an earlier attempt by the federal and state governments to borrow directly from the pension funds was met by stiff public resistance.
However, the federal government has continued with its strategy indirectly through securities investments.
The securities investments include Bonds, Treasury Bills, Agency Bonds, Sukuk bond and Green Bond
PAY ATTENTION: Install our latest app for Android, read best news on Nigeria’s #1 news app
According to a Leadership newspaper report, the pension fund investment in federal government securities still accounted for the bulk of 64% of total pension fund assets, crowding out investments in other sectors of the economy.
The report noted that government borrowing grew by N220billion in one month from N8.51trillion in July 2021 to N8.29 trillion as of the end of August 2021.
Pension fund debt is part of the total domestic debt by the federal government which stands at N17.63 trillion as of the end of June 30, 2021.
Bank loans to government
In a similar development, data from the Central Bank of Nigeria has revealed that bank loans to Government reached N13.03 trillion in September 2021
The amount of money borrowed in September is N307billion or 2.93 percent higher than the N12.6 trillion reported in August.
Benue is listed as one of the states that owe pensioners’ backlog of gratuities
Legit.ng in a related story revealed Benue as one of the states in Nigeria owing pensioners backlog of gratuities.
At the time the report was released to the media, pensioners in the north-central state said they were owed 34 months pension arrears.
It was also revealed that local government pensioners were owed 72 months pension arrears in the state too.
Source: Legit.ng
